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At the end of each billing cycle or when you complete a client’s project, review your time log and calculate your total billable hours for the project. ClickTime’s time tracking software makes it easy for employees to track time throughout the workday, giving you a full picture of their workloads. Automated reminders and approvals done at the click of a button reduce the amount of time managers will spend sifting through timesheets or tracking down employees with incomplete timesheets. And custom reporting options billable hours help you pull the data you need to understand the true value of every employee’s time — whether it’s billable or non-billable. Finally, tracking non-billable time gives you a more accurate picture of upcoming capacity. When managers and project leads understand that they can’t book employees at a 100% utilization rate, they’re less likely to burn out their teams. But as we already discussed, you have to track both billable and non-billable time to calculate a reasonable utilization rate for your staff.
I think you can use 100 hours to give yourself a sense of whether your system is acceptable. If you’re below 100, then you need to make some quick changes. If you’re at, or above, 100 per month, then you can breathe a sigh of relief, stop complaining, and start figuring out how to improve on something that is basically working. Probably not, but I’m pretty much unhappy with everything all the time. She has always been passionate about writing, which is why she has finished her BA in Journalism, at the Faculty of Philosophy, Novi Sad. Ivana is always exploring new methods of how time management can help you organize your workflow more effectively, as well as how you can increase your productivity. Education and training are essential, but these periods should be limited to only a few hours per week or per month.
Driving a Company Culture
Another advantage for the worker is that they have a say in the rate. Usually, customers and the service provider discuss an appropriate rate. Billable hours come into play when there is no definitive way to charge a client for a product or service that accurately includes all the time spent on it. Consultants aid people in different areas of work, from business and marketing to education and administration.
When it comes to compensation, again with all other things being equal, you can expect that lawyer #1 will earn more than lawyer #2 who will earn more than lawyer #3. The partners would say that it is a business, after all. And some firms will leave it at that, which may not make principal caregivers “equal” to those whose personal lives revolve exclusively around professional achievement, but maybe that is okay. Lawyer #1 either has no domestic partner or children, or has children but also has a domestic partner who takes care of the lion’s share of the childcare responsibility. Lawyer #1 has never taken a parental leave and manages to produce 2,000 billable hours per year. You won’t make money on it, but you can identify areas where you could be more efficient or tasks that you may be able to outsource.
Old Law, New Law: Looking for Love in All the Wrong Places
Billable hours, while an interesting measure, reveal only part of a law firm’s financial story. Setting a real-time tracker is better than logging hours manually. This method will help you identify who is approaching the work in a way that is too laid back, and those who work overtime and put in too many hours. You will also be able to keep tabs on the project and improve profitability. By monitoring all working hours, you’ll be able to learn how to make the most out of your non-billables.
A client should not have to pay for something that does not directly involve their case, product, or service. General administrative tasks, networking, or furthering your education in the field do not count as billable time. Again, what is considered as billable time varies between industries. For the most part, any time dedicated to a client’s project is deemed to be billable. For example, any time a lawyer spends reading documents, constructing arguments, or investigating a case that pertains to a client project, these hours are considered billable. Tracking both billable and non-billable time helps you understand the true costs of running your business, assign realistic workloads to employees, and provide more value to your clients.
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